The objective is to save energy and achieve a goal that is set by the EU, which is to reduce 20% energy consumption by 2020. Viewed in absoluteÂ terms (in millions of tons of oil equivalent – Mtoe), we can say that byÂ reducing consumption of 368 Mtoe in 2020 is compared toÂ projected consumption for the same

The objective is to save energy and achieve a goal that is set by the EU, which is to reduce 20% energy consumption by 2020.

Viewed in absoluteÂ terms (in millions of tons of oil equivalent – Mtoe), we can say that byÂ reducing consumption of 368 Mtoe in 2020 is compared toÂ projected consumption for the same year that no change was 1842 Mtoe. This objective should be achieved by the EU as a whole. Currently, with all measures taken by EU and national levels theÂ consumption has decreased by 1678 Mtoe, or 9% of savings.

What are theÂ proposed measures?

Legal obligations for the establishment of energy savingÂ measures in all member countries are: energy distributors or companies thatÂ sell their electricity on the retail market will be required to save 1.5 % ofÂ the total volume of energy sold each year through the implementation ofÂ measures to improve energy efficiency such as heating systems, installation of double glazed windows and insulation of roofs amongÂ end users of energy.

The public sector will have to lead by example: publicÂ bodies will need to encourage the rest of the market to purchase energy efficiencyÂ products and services through a set of legal obligations for the purchase ofÂ energy efficient buildings, products and services. InÂ addition, public bodies need to gradually reduce their energy consumption in theirÂ premises by implementing subsequent year renovation that would include at leastÂ 3% of the total area of â€‹â€‹the building.

The main measure of energy savings for consumers are:Â easy and free access to real time and historical data on energy consumptionÂ through more accurate individual measurements that will empower consumers toÂ better manage energy consumption. Payment will need to beÂ based on actual consumption, according to data collected during theÂ measurements.

Industry: Incentives for small and medium enterprises thatÂ intend to conduct energy audits and to spread good practice principles. Large firms will have to make a review of energy consumption in orderÂ to identify potentials for reducing energy consumption.

Efficiency in energy production: monitoring the level ofÂ efficiency of new capacity for energy production, the establishment of nationalÂ plans for heating and cooling based on sound planning of infrastructure forÂ efficient heating and cooling, including the recovery of waste heat.

What exactly isÂ planned for public buildings?

From January 1st 2014, 3% of public buildingsÂ should be renovated every year with the clear aim of saving energy. Currently, the same level of the buildings are being renewed, but onlyÂ in half of those cases are energy efficiency improvements applied (1.5% ofÂ reconstructed buildings). In practice, this would meanÂ better insulation of the walls, double glazing in kindergartens, schools andÂ municipal buildings, roof repair and replacement of inefficient boilers.

In many cases, cost-optimal reconstruction can lead to aÂ 60% energy savings. Benefits can be estimated at about 6
Mtoe in 2020, which is equivalent to 17 non-constructionÂ of coal powered plants or 9000 wind turbines.

Due to the large share of public buildings (about 12% ofÂ buildings of the EU), its restoration could serve as an engine for greaterÂ market presence of energy efficiency in other sectors as well as developing theÂ necessary skills and knowledge. Buildings (private andÂ public) still consume about 40% of the total energy consumption.

How to get theÂ government to spend money in times of austerity?

Renovating public buildings will largely pay itself offÂ through savings on the energy bills and will also assist economic recovery byÂ stimulating economic activity and employment.

However, it still remains a need for the investments forÂ the implementation of energy efficiency. For this reason,Â the proposed Directive includes provisions to strengthen the market for energyÂ services. In these markets, energy services companiesÂ (ESCO) will pay for the initial investment and get the money back throughÂ savings on energy costs. In addition to energy savings, newÂ business opportunities will be launched and jobs created, for example;Â construction companies or providers of equipment and services. Energy services market currently stands at around 6 billion Euros,Â while in the U.S. it is worth 30 billion Euros and it is further developing. The potential of the EU for this type of market is estimated at 25Â billion Euros.

What measures areÂ proposed for the energy companies?

Energy companies have significant commercial data onÂ energy consumption of its customers who might turn into a significantÂ participant in the market power, but they have no incentive to move from theÂ impasse. To include these companies, the Commission recommendsÂ that all energy distributors or any company that sells energy on the territoryÂ of the Member States must commit to saving energy that would be equal to 1.5%Â of total energy sold in the previous year.

To achieve these savings, the energy companies shouldÂ cooperate with the end users (ie. owners of houses or apartments, supermarkets,Â hospitals …) to implement energy savings. Saving willÂ be measured in absolute terms, which means that companies can still increaseÂ their sales and production.

Each member country will have to devise its own schemeÂ that would best suit their national circumstances and at the same time keepÂ track of certain common EU requirements (ie. the same levels achieved savings,Â savings certification …).

If carried out properly and with sufficiently stringentÂ levels of ambition, a decline of 6.4% of total EU energy consumption by 2020Â will be achieved (ie. 108-118 Mtoe of primary energyÂ which is equal to the joint consumption Poland and Portugal).

Who will pay forÂ these programs?

Depending on the method of program implementation at theÂ national level, the costs are either equally distributed to all customers orÂ energy service company that conduct a preliminary investment which is thenÂ returned through savings on energy bills within a specified period of time.Â

What are theÂ advantages for the industry?

The Commission proposes that large companies need toÂ conduct regular independent energy audits. Member States
are also encouraged to develop incentives for companies to introduce energyÂ management as a systematic framework for the rational use of energy. Sharing best practices and energy efficiency projects aimed atÂ capacity building for energy management are also proposed for small and mediumÂ enterprises.

How about theÂ consumers?

Member States shall ensure that end users of electricity,Â natural gas, heating and cooling and hot water is delivered through districtÂ heating systems to ensure set standards that accurately measures and provideÂ insight into the actual energy consumption per household to provide informationÂ in real time.

Member States shall ensure the accuracy and frequency ofÂ collection, and billing for actual consumption for all sectors covered by theÂ Directive, including energy distributors, distribution system operators andÂ retail energy companies. The deadline for this action isÂ the January 1st 2015. In the long term, theÂ energy companies should introduce smart meters, although in the short term theÂ frequency of collection can be based on existing standards of self-reading byÂ consumers.

Potential savings that could be achieved by theÂ information, due to a more adequate measurement and collection, is estimated atÂ around 80 Mtoe. Already, some pilot projects have shownÂ potential for savings by reducing energy consumption by 15-20% (40% ofÂ electricity) where customers can turn off appliances via a website or mobileÂ device.

What is proposed forÂ district heating?

The Directive stipulates that by January 1st 2014,Â the Member States must establish national plans for heating
and cooling with the aim of developing high efficient cogeneration (CHP) plantsÂ and efficient district heating and cooling.

Cogeneration is the simultaneous production of thermalÂ and electrical or mechanical energy. This method can
achieve savings of at least 30% compared to separate production of electricityÂ and heat. CHP is a mature, proven technology and there isÂ additional economic potential for at least a doubling of CHP capacity by 2020. Despite everything, the share of CHP is not increased and currentlyÂ stands at 11% in comparison to 2004. ThisÂ is an increase of 0.5%. To achieve the appropriateÂ economic potential by 2020 (that was 21%) annual growthÂ of at least 6% is required.

Why bindingÂ targets? What is the “two steps” approach?

The proposed measures are binding and not binding targetsÂ for each Member State: once the Directive enters into force, Member States haveÂ an obligation to implement all its provisions. ForÂ example, they will not be able to decide whether or not to spend 3% of the goalsÂ of reconstruction of public buildings, because if they fail to implement theÂ Directive the Commission can initiate infringement procedures.

In addition, the Commission proposes that Member StatesÂ themselves inflicted non-binding national targets for energy efficiency and theÂ Commission to propose mandatory national targets only if in 2014 they come to the conclusion that the EU is unlikely to achieve the goal ofÂ 20% savings.